RELATIONAL SUPPLY CHAIN GOVERNANCE AND PERFORMANCE OF AGRO PROCESSING FIRMS IN KENYA

Samuel Owuor Ominde, Dr. Anthony Osoro, Dr. Damaris G Monari

Abstract


Agro processing industry establishes the biggest bit of 38% of Kenya manufacturing sector, but has untapped potential to contribute to employment and gross domestic product growth. The sector is inefficient in terms of value addition to the agricultural produce as Kenya exports raw agricultural produce instead of high-quality value-added products. The aim of this study was to determine the effect of relational supply chain governance on performance of agro processing firms in Kenya. The study was anchored on the Game Theory and the Theory of Performance. Survey research design was employed for this study as it enabled the combination of both qualitative and quantitative research approaches. The study targeted 344 agro processing firms in Kenya that were registered with the Kenya Association of Manufacturers and grouped into twelve functional sectors. This study used a census survey and questionnaires were used to collect primary data. A pilot study was carried out to test the reliability and validity of the research instrument. The study used Cronbach’s alpha (α) coefficient to test reliability, while face and content validity were used for checking for validity of the research instrument. The primary data collected was analysed with the use of SSPS version 25. Data analysis was conducted using descriptive statistics and inferential statistics by use of moderated multiple regression analysis. The data was presented using statistical techniques. The study revealed that relational supply chain governance had a significant influence on performance of agro processing firms in Kenya. The study recommended that agro processing firms should implement the systems of relational supply chain governance to enhance their productivity, profitability, sales growth and market share. The study findings are important to regulators to enhance the level of implementation of relational supply chain governance in agro processing firms. This study recommends that it is necessary for future researchers to undertake similar or replicate empirical studies in agro processing firms that are not members of Kenya Association of Manufacturers in order to validate the findings and conclusions of this study. The study also recommends future research study in other areas of manufacturing sectors to establish the performing trends regarding the adoption of relational supply chain governance. The study provides future researchers with a useful methodological reference to carry out studies in this area of relational supply chain governance.

Keywords: Relational Supply Chain Governance; Customer Relationship; Supplier Relationship; Relational Norms; Performance; Agro Processing Firms


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